[1] The purport of Article 87 (1) of the former Local Finance Act concerning the collection of indemnity, and whether this provision applies to a person who is in a legal position to justify possession, use, and profit-making of public property (negative)

[2] The case holding that where a project plan is approved pursuant to Article 33 (1) of the former Housing Construction Promotion Act by including a road site which is a public property under the former Local Finance Act in a project site while promoting apartment reconstruction project, the imposition of indemnity for possession after the disuse of the above land shall be deemed as null and void as it is obvious that the defect is clearly

[1] Article 87 (1) of the former Local Finance Act (amended by Act No. 7663 of Aug. 4, 2005) provides that an indemnity equivalent to 120/100 of the loan or usage fee of the pertinent property shall be collected from a person who occupies, uses, or benefits from the public property without permission for the lease, use, or profit-making of the public property under this Act or other Acts. The purport of the above provision is to collect indemnity from a person who is in a legal position to justify possession, use, or profit-making of the pertinent property, since the possession, use, or profit-making of the pertinent property cannot be collected in cases where the possession, use, or profit-making of the public property is performed without legal title. Thus, the above provision is not applicable to a person who is in a legal position to justify possession, use, or profit-making of the pertinent property. The imposition disposition of indemnity against

[2] The case holding that in the event that a project plan is approved pursuant to Article 33 (1) of the former Housing Construction Promotion Act (amended by Act No. 6916 of May 29, 2003) by including a road site which is a public property in a project site in the former Local Finance Act (amended by Act No. 7663 of Aug. 4, 2005) while promoting apartment reconstruction project, the possession of the road site is deemed to have been permitted pursuant to Article 33 (4) 3 of the former Housing Construction Promotion Act, and the possession of the road site is deemed to have been approved pursuant to Article 33 (4) 3 of the same Act, and even if the road site was abolished and land category is changed to the site, the owner of the road site shall not lose or lose the right of possession, and thus, the disposition of imposing indemnity for possession after

[1] Article 87 (1) of the former Local Finance Act (amended by Act No. 7663 of Aug. 4, 2005; see current Article 81 (1) of the Public Property and Commodity Management Act); Article 19 of the Administrative Litigation Act; Article 741 of the Civil Act / [2] Article 87 (1) of the former Local Finance Act (amended by Act No. 7663 of Aug. 4, 2005; see current Article 81 (1) of the Public Property and Commodity Management Act); Article 33 (1) of the former Housing Construction Promotion Act (amended by Act No. 6916 of May 29, 2003; see current Article 16 (1) 8 of the Housing Act); Article 19 of the Administrative Litigation Act; Article 741 of the Civil Act

[1] Supreme Court Decision 91Nu5211 delivered on March 10, 1992 (Gong1992, 1311) Supreme Court Decision 92Nu18412 delivered on February 23, 1993 (Gong1993Sang, 1097) Supreme Court Decision 2002Du1267 delivered on March 14, 2003

Modern I Reconstruction Housing Association (Attorney Choi-hwan, Counsel for the plaintiff-appellant)

Seoul Special Metropolitan City (Law Firm Lee & Lee, Attorneys Lee Jong-ho et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2007Na1793 decided June 21, 2007

The judgment below is reversed, and the case is remanded to Seoul High Court.

We examine the grounds of appeal.

The court below held that the Plaintiff’s possession of 421.6 square meters of the road (hereinafter “instant road site”) in Seocho-gu, Seoul pursuant to Article 33(1) of the former Housing Construction Promotion Act (wholly amended by Act No. 6916, May 29, 2003; hereinafter “former Housing Construction Promotion Act”) in the course of implementing a reconstruction project is lawful and thus the commencement of possession is not subject to the imposition of indemnity. However, since the land’s disuse and land category were changed to a site, it cannot be deemed as a road that obtained permission for occupancy and use under Article 33(4)3 of the former Housing Construction Promotion Act, and thus, the imposition of indemnity is subject to the imposition of indemnity, and even if the above land is interpreted differently and thus, it is not subject to the imposition of indemnity, it cannot be said that the lease or profit-making of indemnity under the former Local Finance Act (wholly amended by Act No. 7636, Aug. 4, 2005; hereinafter “the above imposition period of indemnity”).

However, Article 87 (1) of the former Local Finance Act provides that the collection of rent or indemnity equivalent to 120/100 of rent or rent of the pertinent property shall be made to a person who occupies, uses, or benefits from the public property (including a person who continues to occupy, uses, or benefits from the public property without obtaining a loan or permission to use or profit from the public property after the period of lease or permission to profit from the public property expires) without permission under this Act or other Acts shall not be applied to a person who occupies, uses, or benefits from the public property (including a person who continues to occupy, uses, or benefits from the public property without obtaining a loan or permission to use or profit from the public property after the period of lease or permission to profit from the public property expires). The purport of this provision is to collect indemnity from a person who is in the legal status to justify possession, use or profit from the public property, and the imposition of indemnity against such person shall be null and void per annum (see, e.g., Supreme Court Decisions 92Nu18412, Feb. 23, 1993>

However, the following circumstances acknowledged by the reasoning of the lower judgment and the evidence admitted by the lower court, namely, the Plaintiff applied for approval of the housing construction project plan to construct apartment sites of this case managed by the head of Seocho-gu Office in the course of promoting apartment reconstruction project on the land outside Seocho-gu Seoul ( Address 2 omitted) and 12, and obtained approval from the head of Seocho-gu on June 21, 2003 pursuant to Article 33(1) of the former Housing Construction Promotion Act. Accordingly, the Plaintiff deemed to have obtained permission to occupy and use the road site of this case pursuant to Article 33(4)3 of the former Housing Construction Promotion Act. According to the above conditions, the Plaintiff appears to have reached an agreement between the head of Seocho-gu and the head of Seocho-gu at the time of the above approval of the project plan to acquire the road site of this case by disuse after acquiring ownership of the above road site of this case. However, considering that the time interval between the time when the Plaintiff was abolished and the time when the Plaintiff acquired ownership right of the above land was inevitable, it appears that the Plaintiff’s acquisition of ownership right of the above site of this case.

Therefore, if the road site of this case was abolished and the indemnity was imposed even after the Plaintiff had the right to possess the road site, the defect cannot be deemed evident even if considering the fact that the above provision of the former Local Finance Act was partially amended in light of the above legal principles.

Nevertheless, the court below held that even if there is a defect in the disposition of imposition of compensation even though the effect of the permission to occupy and use household affairs is maintained and it is not subject to the imposition of compensation, the defect is not obvious. In so doing, the court below erred by misapprehending the legal principles on the interpretation of Article 87 (1) of the former Local Finance Act, which affected the conclusion of the judgment.

Therefore, the judgment below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Jeon Soo-ahn (Presiding Justice)